MR. McCLELLAN: All right, good morning. Another McClellan brothers
briefing. I will turn it over to my distinguished brother here in a
second, but would like to begin by updating you a little bit on Hurricane
Katrina, from our standpoint.

Here shortly some White House officials on board, including Joe Hagin, will
be participating in a video conference call with federal and state
officials from aboard Air Force One.

Q On the plane?

MR. McCLELLAN: Yes, from the plane. We have video conferencing capability
on the plane.

Q Is the President --

MR. McCLELLAN: I don't know if he'll be participating, but I'll try --
I'll keep you posted if he does. I think there is a little bit more of a
staff participation in this call. This is something the White House has
been doing both from D.C. as well as from Crawford over the last few days.
We've been participating in these video conference calls with the federal
authorities and with state emergency management operation centers.

The President, this morning, spoke with our FEMA head, Mike Brown. Mike
gave the President an update. Katrina remains a dangerous storm. We are
coordinating closely with state and local authorities. We continue to urge
citizens in those areas to listen to local authorities. Medical assistance
teams and rescue teams have been deployed, and we're continuing to
coordinate all activities very closely to make sure that the focus is on
saving lives. That's where the top priority is right now, and that's where
it will remain.

The President also, just a short time ago, approved emergency -- approved
major disaster declarations for the states of Louisiana and Mississippi.
This will allow federal funds to start being used to deploy resources to
help in those two states. This is something that was done verbally, and
the states have been -- the governors of those states have been notified of
that approval.

And I think that's the latest update I have, in terms of Katrina. And with
-- I'm sorry --

Q This is a semantic thing, I guess, but what's the difference between
the disaster declarations he made over the weekend and what he's doing this
morning?

MR. McCLELLAN: Well, the ones yesterday enabled federal authorities really
to pre-position supplies and teams so that they were in close -- in full
coordination with state and local partners. Today really allows FEMA now
to start drawing down or using federal funds to get resources to those
areas to help with the response and recovery from this disaster.

Q What about the oil reserve? Is he going to make a decision about
whether to release?

MR. McCLELLAN: Well, as far as that, the Department of Energy is
monitoring the situation. They will make assessments as they are able to
do so, and that's really where it stands right now.

Q It has not been released?

MR. McCLELLAN: Well, yes -- I mean, it's something that the Department of
Energy will continue to monitor, and then they'll make assessments. And
that's really where it stands right now.

Q When do you expect to hear some sort of decision from them?

MR. McCLELLAN: Well, first of all, with the storm still over the impacted
region, I'm not sure that they are -- I'm not sure what the status is, in
terms of DOE being able to make the assessments they need in order to make
any decisions, or to make any recommendations for a decision to be made. I
know that they have people in the region, as well as back in Washington,
who are continuing to monitor the situation, and they'll be making the
assessments. I would encourage you to stay in touch with the Department of
Energy in the short-term. Obviously, that is -- the Strategic Petroleum
Reserve is there for emergency situations, and that would include natural
disasters. But it's just too early to know at this point.

Q What is he expecting, the ability to produce gasoline and oil to
refine, or are they assessing just the need?

MR. McCLELLAN: I think you should talk to the Department of Energy about
that. I mean, they'll have to make assessments based on the damage from
the storm.

Q Do you know if any refineries have requested releases?

MR. McCLELLAN: I don't. You'd have to check with Department of Energy on
that.

Q They point out concerns -- I mean, production is at a standstill now,
and you've got --

MR. McCLELLAN: That's why Department of Energy is on top of this, and
they're looking at all these issues.

All right. Right now I'm going to turn it over to the rest of the day's
events, the two conversations that the President will be participating in
on Medicare. I'm going to turn it over to my brother, Mark, the head of
Centers for Medicare and Medicaid Services.

DR. McCLELLAN: Thank you, Scott. In addition to dealing with the urgent
issues related to the hurricane, the President will be participating in
conversations today in Arizona and Southern California with some people
with Medicare experts working with Medicare beneficiaries and health
professionals about the upcoming changes in the Medicare program.

He will also be announcing some important news about the Medicare
prescription drug benefit. Medicare beneficiaries all over the country are
going to have access to drug coverage that will cost less than originally
expected. This includes plans with premiums of $20 or less per month. The
options will also include plans offering zero deductibles and plans that
provide some coverage in addition to the standard Medicare drug benefit.
This is very good news for people with Medicare. People with Medicare will
be able to choose drug plans costing as little as $20, or even less, while
getting access to the drugs they need at convenient pharmacies.
Competition and choice are bringing lower costs for the drug coverage that
seniors and people with a disability need.

Earlier this month we announced that the national average premium, the
average cost of this coverage to seniors, was going to be around $32.
That's about 15 percent lower than had been predicted originally. The cost
to the government would be correspondingly lower. Now, as we're nearing
the completion of the reviews of the Medicare drug plans, it's clear that
beneficiaries will have even lower cost options. This includes at least
one drug plan in every state, except Alaska, with premiums below $20 per
month, and in many cases significantly below $20.

In addition, people with Medicare will also have access to additional
benefits beyond the standard Medicare coverage. People with Medicare can
choose plans with no deductible or with some additional benefits if they
prefer. That includes zero-deductible plans, and it includes plans that
help beneficiaries pay for the costs beyond the standard Medicare coverage
-- that's when they spend more than $22,250 a year and before their
out-of-pocket costs reach $3,600 a year in Medicare standard coverage.

And in every region, beneficiaries with limited income, including those
eligible for Medicare and Medicaid, will be able to choose from a plan with
zero premiums offered by at least five organizations. By choosing a plan
that meets their need, people with Medicare can get lower costs and
additional benefits, and all of the plans available, including these
lower-cost options, must meet Medicare standards for access to medically
necessary drugs and convenient neighborhood pharmacies.

Now we also have some information about the robust, competitive response by
Medicare advantage plans. These are the HMO and PPO private health plans
that enable many beneficiaries to get more comprehensive coverage. These
plans will have additional benefits and premiums that are significantly
better, on average, than the stand-alone prescription benefits. That means
many plans with premiums well under $20 a month, and additional coverage,
as well.

Beneficiaries in Medicare right now are saving about a hundred dollars a
month, on average, when they join a Medicare Advantage Plan compared to
traditional Medicare, with a Medigap Plan or traditional Medicare alone,
and the lower premiums and additional drug coverage mean that these savings
will continue as the prescription drug benefit starts in 2006. Right now
we're completing our final review of all of these prescription drug plans
on schedule. We will have more details in the coming weeks, well ahead of
when people can start choosing a prescription drug plan.

CMS is going to help Medicare beneficiaries get the information they need
to choose the plan. This is a partnership with Medicare beneficiaries to
help them lower their drug costs, to make sure they never again have
coverage that falls behind modern medicine, and most importantly, to help
them stay well. The options for lower costs and additional coverage are
there because the drug plans know that beneficiaries won't choose them
unless they provide the coverage that beneficiaries want at the best
possible price. And we're going to help people with Medicare and their
families get a plan that's a good fit.

This fall, Medicare will work with counselors, advocates, health
professionals, and other partners to assist seniors and people with a
disability, and their family members, in making a choice about these
important benefits.

And the President will carry on this national conversation today. He's
going to talk about key features in the new Medicare benefits, the most
important benefits in the Medicare program in 40 years. He'll be meeting
with some pharmacists and experts on outreach and support for seniors and
some of the beneficiaries in the program themselves.

These partnerships can help people take advantage of the new benefits and
make sure they get the lower cost and additional coverage that Medicare
will be delivering with the drug coverage in 2006.

MR. McCLELLAN: Can I mention one thing before you go to questions, too?
One, Mark is going to be doing a conference call later that will be open to
reporters, I think from California. And HHS can probably get you more
information on that. But I'll make sure John Roberts here gets our press
corps that information, as well. And, two, did you mention what the
original projection was, to remind everybody?

DR. McCLELLAN: Right. To remind everyone, the original projections were
that beneficiary premiums are going to average about $37 a month, and we've
already projected that on average, the costs are going to come in around 15
percent below that -- 15 percent lower for beneficiaries and for the
federal government and taxpayers.

With the new options that we're announcing today, it's clear that many
beneficiaries will be able to choose plans that enable them to get the drug
coverage they need for much less than that.

MR. McCLELLAN: And, too, on the conversation, participants that they can
expect will be some seniors, pharmacists, experts -- like my brother. And
at the first event, I believe Senator Kyl will likely introduce the
President, and at the second one, Congressman Dreier will likely introduce
the President.

Q When we're done talking to Mark, can we ask you a couple more
questions, to go back to you? Okay.

So when you're talking about the availability of these below-$20 plans, the
premiums, that's not a new average cost? That's just -- those are
individual plans that will be available for people to choose from?

DR. McCLELLAN: That's right. Those are individual plans that people can
choose, and that's why it's important for people to spend a little bit of
time this fall thinking about what coverage is best for them. Every state
in the country, expect Alaska, will have plans available for less than $20,
and Arizona and California, where we're going today, for example, there
will be multiple plans available for under $20 a month.

Q Previous to this news, what was the lowest cost plan that you guys
thought would be out there?

DR. McCLELLAN: Well, we had not made any information available about the
specific plans because before now, we were not far enough along in the
review process to be confident that these choices will be available in the
fall. We're not going to approve any drug plan unless we are confident
that they can meet all of our standards for access to medically necessary
drugs, access to pharmacies, and all the other requirements in the Medicare
drug benefit.

Now, as we're very close to completing that process, we're providing more
information and we're on schedule to get out even more complete information
about the drug choices before people actually can start enrolling in the
plan. That happens beginning on November 15th, and well ahead of that,
they'll have specific people with Medicare and their family members --
we'll have specific information they can use to choose a plan that's a good
fit for them, including these options for under $20 a month.

Q What's -- just out of curiosity -- what would be the co-pay on
something as little as, like the $20 a month premium?

DR. McCLELLAN: All of those plans have to meet Medicare standards, which
means that Medicare will be paying for the equivalent of 75 percent of the
cost of prescription drugs after a $2,000 -- after a $250 deductible, up to
$2,250. All of them also must provide protection against very high
expenses.

So they're all meeting our standards. And in general, that means that
people are going to get 75 percent of their costs paid after deductible.
And then they're all up to coverage limit, and then they're also going to
get protection against very high costs.

Q Are these like new entrants into the market, or are they --

DR. McCLELLAN: Many of them are -- many of them are well-established plans
that will be participating nationally. And again, we'll have more specific
information coming in a matter of just a few weeks.

Q How many plans, overall, will there be?

DR. McCLELLAN: We're also releasing some information on that today. In
each region of the country, there will be between 13 and 21 organizations
offering -- I'm sorry, between 11 and 23 organizations offering stand-alone
prescription drug plans. And again, Medicare will be providing resources
to help people choose among these plans -- our website at Medicare.gov, our
24/7 customer service line at 1-800-MEDICARE for people who don't want to
go online, and face-to-face help from organizations like some of those that
are participating in the conversations with the President today.

Q Scott, can you look ahead a little bit to tomorrow, to what the
President is going to talk about in San Diego?

MR. McCLELLAN: It might be better for me to do a little bit more on that
later today. I mean, just as a very general matter -- you're asking about
the remarks, or you're just asking about the day, or all of the above?

Q Mostly remarks.

MR. McCLELLAN: First, on the remarks, tomorrow's remarks are really
focused on commemorating our World War II veterans and it's a commemoration
of World War II.

Now, in the context of the remarks, the President will draw some historical
comparisons between the war that we were fighting then and the war that we
are fighting -- the global war that we're engaged in now. So I think that
there will be some comparisons there between the murderous ideology that we
were -- that we joined together to defeat back in World War II and the
murderous ideology that we're working to defeat today.

But it's -- the remarks really are focusing on commemorating World War II
and our veterans and all those who sacrificed -- made the ultimate
sacrifice in the defense of freedom.

Q It's at a Navy base. Will there be a Naval audience?

MR. McCLELLAN: Yes, it's a Naval station there, and so it will be military
personnel who will be the primary audience. I think, and I'll double check
all this and try to get you more information later in the day, but when the
President gets there, I think he's going to be visiting with a number of
doctors and medical personnel that are there. Then he'll make the remarks
following that.

Q Will he be meeting with any families of war dead?

MR. McCLELLAN: Let me just double check. Let me just double check that.
There might be -- I think there are some wounded troops that are there, but
let me just double check that. I'll get you more information on that later
today. And I'll try to give you a little bit more of a preview. He's
still been working on the draft for tomorrow. That's why I didn't want to
go too much further into it. But, I mean, I think you should look at it
overall as a commemorative speech.

Q Is it at the Coronado Naval Air Station or is this going to be at the
Naval base itself?

MR. McCLELLAN: It will be the Naval Air Station -- the Naval Air Station.
Anything else?

Q Are there any plans so far to go to Florida?

MR. McCLELLAN: No updates to the President's schedule. Right now, our
focus continues to be on making sure that we're saving lives and focused on
getting help to those who are in harm's way.

* * * * *

MR. McCLELLAN: Let me update you on tomorrow -- I was double-checking the
schedule for tomorrow. When we get there to San Diego, at the Naval Air
Station, the President will make the remarks, and that will be the first
thing on our stop. Then he's going to participate in an interview with
Armed Services Radio and Television. And then he will visit with health
care providers at the medical center at the Naval Station. And then he
will visit with some wounded military patients that are at the medical
center. And then we'll depart after that.

* * * * *

MR. McCLELLAN: Quick update. He spoke with Mike Brown again on the plane,
and we did -- the staff participated in a video conference call, or they're
ongoing. One of the main things that our FEMA head, Mike Brown, emphasized
was that it remains a serious situation, and there's still a lot of concern
about storm surge, flooding, the damage and destruction on the ground,
power outages, and things of that nature. And on the conference call,
there were updates from all the different states that were being received,
as well.

And federal and state and local authorities continue to work round the
clock. The storm is still over these impacted areas, and it remains a very
serious situation. And the President continued to ask questions of Mike
Brown to make sure that we were doing everything in our power to save lives
and to help those in need. And so I just wanted to update you on that.